Construction businesses across England will soon have access to greater financial support when recruiting young apprentices.
From autumn 2026, eligible non-levy-paying employers will be able to claim a new £2,000 apprenticeship hiring payment, while apprenticeship training and assessment costs for eligible apprentices aged 16 to 24 will be fully funded by the government. These changes are designed to encourage more businesses to invest in skills and help address workforce shortages across key industries, including construction.
For many construction SMEs, the new support could make apprenticeships a more affordable and attractive route to developing future tradespeople. However, eligibility depends on several factors, including the employer’s levy status, the apprentice’s age and when both employment and training begin.
What’s Changing?
There are two separate funding changes that construction employers should be aware of.
Fully Funded Apprenticeship Training
From 1 August 2026, eligible non-levy-paying employers will no longer need to make a contribution towards eligible apprenticeship training and assessment costs for apprentices aged 16 to 24. Instead, these costs will be funded by the government up to the maximum funding band for the relevant apprenticeship standard.
New £2,000 Hiring Payment
From 1 October 2026, eligible non-levy employers can receive a £2,000 hiring payment when they recruit a new apprentice aged 16 to 24 and meet the relevant funding requirements.
Although announced alongside one another, these are two separate forms of support. One covers training costs, while the other provides direct financial support to employers taking on young apprentices.
Who Can Claim the £2,000 Payment?
The payment is available to employers who do not pay the Apprenticeship Levy.
Many construction SMEs fall into this category, but eligibility is based on levy status rather than business size. A company may consider itself an SME yet still pay the levy if its payroll exceeds the relevant threshold.
The Apprenticeship Levy generally applies where an employer, or a group of connected employers, has an annual pay bill of more than £3 million. Businesses operating through several companies should review their position carefully before assuming they qualify.
To qualify for the hiring payment, the apprentice must:
- Be aged between 16 and 24 when their apprenticeship training begins.
- Have an apprenticeship practical period that starts on or after 1 October 2026.
- Be linked to the employer’s Apprenticeship Service account through the correct PAYE scheme.
- Have worked for the employer for no more than 90 days before the apprenticeship practical period starts.
There is also a limited transitional arrangement covering certain apprentices whose employment began on 1 or 2 July 2026 and whose apprenticeship starts by 1 October 2026.
How Will the Payment Be Made?
The £2,000 payment will be paid in two instalments.
- The first £1,000 becomes payable once the apprentice has completed 90 days on programme.
- The second £1,000 is normally paid after 365 days, provided the apprentice remains employed and continues their apprenticeship.
- For some shorter apprenticeship programmes and foundation apprenticeships, the second payment may be triggered after 242 days instead.
Payments are made to the training provider first, which must then pass the full amount to the employer within 30 working days.
For that reason, businesses should ensure:
- Their PAYE details are correct.
- Their Apprenticeship Service account is up to date.
- Their training provider has accurate banking information.
- Employment and apprenticeship records are maintained correctly.
It’s also worth remembering that if an apprentice leaves before reaching a payment milestone, the employer may not receive the full £2,000.
What Does Fully Funded Training Actually Mean?
For eligible apprentices aged 16 to 24 who start from 1 August 2026, the government will fund all eligible apprenticeship training and assessment costs up to the relevant funding band maximum.
For smaller construction businesses, this removes a cost that previously had to be factored into apprenticeship planning.
However, employers are still responsible for the day-to-day costs of employing an apprentice, including:
- Wages
- Pension contributions
- Workwear and PPE
- Tools and equipment
- Travel costs
- Supervision and mentoring
- Other employment-related expenses
The funding supports training costs, but it does not remove the wider responsibilities that come with employing an apprentice.
Where an apprentice is aged 25 or over, the standard non-levy co-investment arrangements will generally continue to apply.
Which Construction Apprenticeships Could Qualify?
The funding is not limited to a particular trade and may apply across a range of approved construction apprenticeship standards, including:
- Bricklaying
- Carpentry and Joinery
- Roofing
- Plastering
- Plumbing and Domestic Heating
- Installation and Maintenance Electrician
- Groundworks
- Painting and Decorating
- Construction Plant Operations
- Construction Site Supervision
The apprenticeship must relate to a genuine job role and provide the training needed for the apprentice to become competent in that occupation.
Before recruiting, employers should speak with a training provider to confirm that the apprenticeship standard is available and can be delivered in their area.
Apprentices Must Be Genuine Employees
An apprenticeship is more than a training programme. The apprentice must be employed in a genuine role and receive appropriate support throughout the programme.
Businesses will need to provide:
- A contract of employment
- An apprenticeship agreement
- A training plan agreed with the training provider
- Paid time for apprenticeship training
- Suitable supervision and workplace experience
Employers should ensure they understand these responsibilities before taking on an apprentice.
Official guidance on employing an apprentice explains the employer’s responsibilities throughout the programme.
Don’t Forget About Wages
Government funding does not cover apprentice wages. Construction employers must still pay at least the applicable National Minimum Wage and ensure apprentices are paid for time spent completing required training during working hours.
For apprentices aged 19 or over, different minimum wage rules may apply once they have completed the first year of their apprenticeship.
Why This Matters for Construction SMEs
Many construction businesses are finding it increasingly difficult to recruit experienced tradespeople. At the same time, a significant proportion of the industry’s workforce is approaching retirement.
Apprenticeships can help bridge that gap by giving businesses the opportunity to train workers to meet their own standards and future workforce needs.
While apprentices require time, supervision and investment, the combination of fully funded training and a £2,000 hiring payment can help reduce some of the upfront costs involved in recruitment and development.
For businesses looking to build a long-term talent pipeline, the new funding could make apprenticeships a more attractive option than ever.
What Should Employers Do Now?
Businesses considering apprentice recruitment from autumn 2026 should start preparing early.
Key steps include:
- Confirming whether the business is a non-levy-paying employer.
- Identifying the role they genuinely need to fill.
- Selecting the appropriate apprenticeship standard.
- Speaking with a training provider about eligibility and programme availability.
- Setting up or reviewing their Apprenticeship Service account.
- Checking that the correct PAYE scheme is linked to the account.
- Keeping accurate records of employment and apprenticeship start dates.
Taking these steps early can help avoid delays and ensure funding is available when recruitment begins.
Common Mistakes to Avoid
While the new funding offers valuable support, construction employers should take care not to make assumptions about eligibility. Not every SME will qualify, as entitlement is based on apprenticeship levy status rather than business size alone.
Businesses should also avoid employing someone for more than 90 days before their apprenticeship starts, selecting an apprenticeship that does not align with the individual’s actual job role, or assuming that government funding covers wages, tools, PPE or other employment-related costs.
It is equally important to pay apprentices for all required training time, ensure the correct PAYE scheme is linked to the Apprenticeship Service account, and avoid factoring the full £2,000 hiring payment into budgets before both payment milestones have been met.
Checking eligibility and administrative requirements before recruitment begins can help prevent funding issues and unexpected costs further down the line.
How The Infinity Group Can Help
At The Infinity Group, we help construction businesses stay up to date with industry developments, funding changes and evolving employment requirements.
Alongside our specialist CIS payroll and outsourced payroll services, we provide practical insights and guidance to help employers understand their responsibilities, manage payroll accurately, maintain compliance and reduce administrative burden.